<p>Just wondering what you guys think ...</p>
<p>Of course they shouldn’t. Schools are non for profit organizations so the government shouldn’t take away necessary funds.</p>
<p>School endowments are getting a free ride when compared to foundations. I believe that schools should follow the same tax rules that foundations do. Foundations are not taxed unless they don’t fund programs at a specified level (minimum percent payouts). </p>
<p>Not being taxed is a form of public subsidy and unless the organizations that control these funds clearly act in the public interest there is every reason to be taxed just like every other institution in the U.S.</p>
<p>Unless I am missing something, schools do follow the same payout requirements as foundations. Bostondad2, what specifically are you referring to?</p>
<p>I’m not sure about prep schools, but there is an exemption for colleges. The rush to improve financial aid by Harvard, Yale, Stanford, et al 2 years ago was driven in part by threatening language from some in Congress regarding removing the exemption.</p>
<p>Just to clarify, I meant an exemption from the payout requirements. Some colleges with large endowments were not paying out at the minimum level required of foundations (5% I think). By increasing financial aid they exceeded those thresholds and headed off moves in Congress to enforce minimums. Of course, now that those endowments are off 20+% it has become a non-issue.</p>
<p>I think we can all agree that this is a dead letter for now.</p>